🤝 Security Token Prime Insights: 9/30/2024

Exclusive Intelligence for Security Token Prime Members

September 30, 2024

Summary and Key Takeaways

1. Visa Tokenized Asset Platform Goes Live, BBVA Marks First Customer

The very originally branded VTAP (that’s sarcasm!) is officially going live. And the only thing that really matters in the platform name is the word Visa. It’s exciting to see that Visa sees the opportunity in tokenization recognizing that banks will use this technology to automate all financial operations. BBVA is expected to roll out next year to use what CoinDesk reports as FIAT-backed tokens for VTAP clients to use for transacting RWAs. 

Though you might expect a permissioned or even DLT-based platform, you’d be wrong. The announcement suggests VTAP will use Ethereum. Could there be more to it than just a stablecoin issuance? Are they custom stablecoins for each client? Are there additional back office administration tools that come attached to the platform to manage RWAs? We will be on the hunt to find out the details behind it and report back to you.

2. European RWA Marketplaces Heat Up With Assetera, Taurus, And 21X

Assetera has been making moves with their Polygon-based exchange for RWAs in Europe under the Austrian regulator. They’ll be listing the €20 million SID real estate token by SIDO Immobilien out of Austria. But it doesn’t stop there as two other European marketplaces made news.

Taurus, which was recently selected by State Street for their tokenization technology, also announced their partnership with issuance platform Aktionariat to funnel listings to their FINMA (swiss regulator) licensed marketplace. Finally, 21x has been making quite a bit of noise as they prepare for launch and last week they announced a partnership with Apex Group for their ESMA-regulated RWA exchange, leveraging a European-wide licensure. If you’re not bullish on RWAs in Europe, you should be because the secondary market ecosystem is about to turn on blast!

3. Ethena Launches Second Stablecoin Tied To BUIDL By BlackRock

Ethena is already well known for their USDe stablecoin which they call a synthetic dollar that is backed by Bitcoin and Ethereum delta hedging. Now, we think they are willing to cannibalize the success of their first stablecoin for their next one, UStb.  That’s likely because this one is exclusively using BUIDL and is a completely independent and separate product. Is there a use case and demand for these two different products or is Ethena going to shift focus completely towards UStb? With USDe ranked as the fifth largest stablecoin, it’s hard to think they will reprioritize their resources but is splitting liquidity and demand between the two a wise move?

4. Legendary NYC PE Firm Guggenheim Gets In On Tokenization

Anyone with over $300 Billion in assets under management would be considered an incumbent in finance. And what marks as another win for Ethereum, the firm has gone and tokenized $20 Million worth of commercial paper according to a press release. They used Zeconomy for the tokenization tech and was naturally done by their treasury management services. And if you need help putting two and two together, the rise of tokenized treasuries to over $2 Billion is just the beginning.

The cash management business is so big and entrenched in the old guard that these announcements are likely to become commonplace for the next 2 years as this entire segment is forced to adopt this technology. It should not be underestimated how automation, new capabilities, and savings in basis points add up to in this razor thin category. Remember that repos are already on track for trillions on Broadridge and JPM’s Onyx. This category is next and it will grow faster than anyone has publicly predicted.

5. New Asset Class To Be Tokenized: Telecom

No asset is safe from tokenization. Why use a pen paper when you can use Excel? Why use Excel when you’ve got a blockchain? No one went back to the horse after cars hit the mainstream. That’s why it makes complete sense that the telecom industry is another target for RWAs. Hawk Networks has launched a platform to do just that called Liquid Infrastructure.  Apparently a key element to telecom asset management is the ability to do revenue sharing, which we all know is a phenomenal use case for tokenization. They use the Althea L1 blockchain and have already performed a pilot run in Pheonix, Arizona with LongFi solutions. 

This is awesome specifically because telecom represents another largely inaccessible asset class to most people apart from buying the publicly traded parent. From towers, to fiber optics, and more, this could well mean a whole new playbook for telecom that could lead to an edge in the marketplace. The business is largely financing the growth of physical networks so we really mean revolutionary.

Notable Market Headlines

Institutional Activity

NEW STM REPORT AVAILABLE - Updated tZERO Interview!

Look out for STM’s latest report: State of the Tokenization Industry 2024 - The Year of the RWA which features over 350 service providers and tokenization issuers and their updates for the year to date across 18 categories from blockchains to issuances to DeFi and all the updates from tokenization platforms and marketplaces. Dive into the report, made possible thanks to SteelWave Digital and now with a special interview with tZERO! Check out the updates. 

STM Data

Last week the Security Token Market Data Team covered the market’s most volatile assets. This week we’d like to shift focus to the most active assets, please find below the top 5 and their respective volumes for the last 7 days.

Asset

Marketplace

Volume

BlackRock USD Institutional Digital Liquidity Fund (BUIDL)

Securitize Markets

$10,147,062

Vidby Shares SHA

Aktionariat

$639,352

Enegra

BigONE

$463,462

Franklin OnChain U.S. Government Money Fund (BENJI)

Benji Investments

$367,298

Aspen Coin

tZERO

$149,845

It’s no surprise BUIDL is having the most activity of the security tokens given they’re curating to qualified purchasers AKA bigger amounts of tokens moving. That said Vidby is a security token that in the past showed lots of volume, slowed down, and has come back up. This along with other tokens on Aktionariat should be kept up with due to Aktionariat’s recent partnership with Assetera and this past week another with Taurus’ TDX. 

Keep up with security token trading data on STM.Co!

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Events

Recent Recordings

  • (NEW) Beyond the Hype: Cracking the Code of Successful Asset Tokenization with BlockInvest and Polygon (Recording Link)

  • Risk Management in Tokenized Assets with Moody's and Particula (Recording Link)

  • Blockchain Meets Construction with Inveniam & LV8R Labs (Recording Link)

  • Non-Performing Loans with BlockInvest and Davis & Morgan (Recording Link)

  • Issuer Spotlight: Tuscany National Token (Recording Link)

  • Platform Spotlight: Block Time Financial (Recording Link)

  • The TradFi/DeFi Hybrid with Maple, Centrifuge and Swarm (Recording Link)

  • Platform Spotlight: REtokens' New Platform with Tyler Vinson and David Kirschbaum (Recording Link)

  • Powers Hour: New SEC “Dealer” Rule Expansion and DeFi Impacts (Recording Link)

TokenizeThis Workshop Tour Around the US Launches September

Get your tickets today for a full day masterclass around tokenization from A to Z. There continues to be a massive education gap in the industry and off the success of the original workshop in Miami last May, we’ve decided to go nationwide. We’ll be visiting NYC, Houston, Boston, LA, SF, Atlanta, and Chicago, check out workshop.stm.co for more information. Use code PRIME for 15% off.

Hello readers,

The US has long been a leader in the tokenization field due largely in part to the fact that there are clear rules to follow to stay compliant, even if they are not perfect. Europe on the other hand always fell behind and the opportunity to have individual regulation in some specific European countries did not lend an edge enough to create a booming ecosystem there. A booming ecosystem is one that has a complete lifecycle for tokenization from issuance to secondary trading. 

As we are seeing, Europe is coming online so to speak with numerous exchanges and platforms now having sufficient testing time to work directly with the regulators in their sandboxes. What does this mean? It means Europe has a second chance at becoming the leader of RWAs in 2025 if it is able to continue to mobilize and foster the technology and regulation around it. Keep your eyes on Europe!

Happy tokenizing,
Herwig “Happy” Konings
CEO, Security Token Group 
Follow me on X / LinkedIn

Herwig’s Pick: Ethena

Kyle’s Pick: Abra

Find out why and more every Friday live at 2pm EST on LinkedIn or X/ Twitter. Past episodes available on Youtube or your favorite podcast platform! 

Helpful Resources

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